Denel still fighting blacklist in India

Written by defenceWeb, Friday, 27 July 2018

Despite earlier indications that Denel was free to operate in India, it appears the company is still on India’s blacklist.

The Indian Ministry of Defence in February this year published an updated list of firms debarred/put on hold/suspended from doing business with the Ministry of Defence. Six firms were listed as debarred and 14 were listed as put on hold/suspended, including Denel, along with other companies such as Leonardo, AgustaWestland and the Atlas Group.

Denel was blacklisted in India in 2005 after allegations that it paid kickbacks to Vara Associates, a company based in the Isle of Man, to help secure five deals between July 1999 and April 2005, to supply the Indian Army with 1 000 anti-material rifles and over 300 000 rounds of ammunition. No irregularities were found during investigations in South Africa, the Isle of Man, Switzerland and the UK.

After eight years of investigation by the Central Bureau of Investigations, Denel was expected to be cleared in 2014 but now it appears this has not been the case.

According to India’s Economic Times on 26 July, Denel has offered to waive off close to $100 million it won from arbitration against India if New Delhi were to remove it from the defence ministry’s blacklist.

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“State-run Denel’s offer has come after the Central Bureau of Investigation filed a closure report on corruption cases against the company. The company has also received favourable court orders in other related matters,” the Economic Times reported.

The newspaper added that a Denel team was recently in India recently to discuss the matter ahead of the BRICS summit underway in Johannesburg this week.

Apparently Denel’s continued blacklisting is due in part to legal cases that arose from the blacklisting.

By the time Denel was blacklisted in 2005, 400 NTW-20 anti-materiel rifles had been delivered. The contracts with India involved the supply of 700 NTW-20 rifles, knock-down kits for another 300 rifles and 398 000 rounds of ammunition.

After the Denel deal fell through, India’s Ordnance Factory Tiruchirappalli began manufacturing the locally developed Vidhwansak multi-calibre anti-materiel rifle, which bears many similarities to the NTW-20. Available in 14.5 mm, 12.7 mm and 20 mm calibres, it has an effective range of approximately 2 000 metres.

Denel was hoping to bid for 155 mm artillery programmes in India as the ban on Denel stopped the Indian Army’s acquisition of 155 mm artillery as well as a project to install Denel’s 155 mm gun on Indian tank chassis.